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WHAT IS NATURAL CAPITAL?

Each year, our planet's complex land and water systems—a natural living infrastructure—produce up to $72 trillion worth of free goods and services essential to a well-functioning global economy. Though measuring the financial value of this infrastructure is not impossible, these benefits are not typically bartered and sold in the marketplace, so their value is exceedingly hard to price on corporate or government financial statements.
 
   
   

What is Natural Capital




   
   
   
   
   
We define Natural Capital as the stock of renewable and non-renewable natural resources (e.g., plants, animals, air, water, soils, minerals) that combine to yield a flow of benefits to people.
 
   
     

The 2005 Millenium Ecosystem Assessment tells us that approximately 60% of the ecosystem-services described above are, through loss of biodiversity, pollution, climate change and bad land use, being degraded. The Economics of Ecosystems and Biodiversity studyteam  calculated the economic impact of the degradation of natural systems to approximately 2 to 5 trillion USD per year.

Governments and business alike are beginning to recognise the critical importance of natural capital as the foundation of all economic productivity and the associated benefits from valuing it, such as greater transparency over supply chain security and a deeper understanding of the risks to business continuity. Natural capital is very often a core input into an organisation’s business model and some are beginning to account for their impacts on natural capital through their operations, products and services. Many methodologies already exist in the emerging discipline of natural capital accounting. What is needed now is for organisations to be provided with a common approach for assessing these inputs and impacts.

 

 

Goods and services provided to humans by sustainably managed natural capital include:

  • clean air
  • water
  • food
  • energy
  • places to live
  • materials for products
  • materials for recreation
  • materials for protection from hazards
     
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